TMI Tax Updates - e-Newsletter
May 4, 2021
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Securities / SEBI
Insolvency & Bankruptcy
PMLA
Indian Laws
Highlights / Catch Notes
GST
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Grant of Anticipatory Bail - valid and genuine purchases or not - no real apprehension is found to exist of the applicant being arrested - Merely because the applicant has been called upon to participate in the inquiry against M/s. G.K. Traders, does not involve an automatic accusation against the applicant and it also does not involve the risk of his arrest. - Accordingly, leaving it open to the applicant to lead such evidence before the revenue authorities - HC
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Non-compliance with the mandatory pre-deposit before filing of appeal - Section 107(6)(b) of the CGST Act, 2017 - The petitioner shall make the mandatory pre-deposit @ 10% on the amount of tax in dispute as envisaged under Section 107(6)(b) of the CGST Act, 2017 within the period of 15(fifteen) days from today with the Joint Commissioner (Appeals) - HC
Income Tax
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Validity of reopening of assessment - The very purpose and object of the proviso under Section 147 is to ensure that the assessee pays the income tax in the manner prescribed under the Statute and therefore, the Courts are expected to be cautious, while dealing with such intricacies and the disputed facts, which all are to be adjudicated by the competent authority by following the procedures as contemplated. - HC
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Denial of approval U/s 80G(5)(vi) - if there is no change in the objects of the assessee Trust which were considered to be charitable while granting registration U/s 12AA of the Act then it cannot be said that the same objects were not charitable in nature while granting approval U/s 80G. - AT
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Addition u/s 68 - receipt of gift - the primary onus to establish the identity and creditworthiness of the concerned donors as well as the genuineness of the relevant transactions involving gifts thus was duly discharged by the assessee by producing the relevant documentary evidence and without bringing on record any material or evidence to disprove or dislodge the claim of the assessee, the authorities below were not justified in treating the gifts received by the assessee as unexplained cash credit u/s 68 merely on the basis of doubts and suspicion - AT
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Revision u/s 263 - Assessee had to bear the loss as value of US dollar increased over the period since receipts of the remittance and date of export. In most of the cases of the remittance, assessee utilized the forward exchange contract made in the last year where value of the US$ was fixed which is lower than the value of US$ on the date of actual remittance. - Revenue has not brought any material on record to demonstrate that the view taken by the AO was an impermissible view and was contrary to law or was upon erroneous application of legal principles necessitating the exercising of Revisionary powers u/s 263 of the Act. - AT
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Penalty u/s 271B - non-filing of Tax audit report u/sec. 44AB of the Act within the due date under section 139(1) - Due to technical issues and pressure of work, the assessee firm could not file their return of income within the due date specified under section 139(1) - Thus the delay is filling is not a wanton act and the explanations has a reasonable cause. - Penalty directed to be deleted - AT
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Revision u/s 263 - addition u/s. 68 - This is not a case of non-enquiry or non-application of mind. The Assessing Officer has examined all the evidences and taken a possible view. Just because the total income determined by the Assessing Officer in the second round of assessment proceedings, is less than the income determined in the first assessment proceedings, the order does not become erroneous. - AT
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Reopening of assessment u/s 147 - If it is found by the Assessing Officer on such verification that the amount in question represents the sale proceeds of investments which were made by the assessee out of share capital and share premium amounting to ₹ 11.04 crores, which is already treated and accepted as income of the assessee by virtue of the settlement of dispute under Vivad Se Vishwas Scheme in A.Y. 2008-09, the same cannot be treated as income of the assessee again for the year under consideration as the same would amount to double addition. - AT
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Penalty u/s. 271(l)(c) - The words may direct that such person shall pay by way of penalty in section 271 leave a certain amount of discretion in imposition of penalty which need not be imposed when there is a minor breach of the law and when having regard do the facts ends of justice require that the assessee should not be penalized. So also where the circumstances of a case establish that the mistake is accidental and inadvertent and there is no material at all to justify any want of bona fide or any gross neglect, imposition of penalty is not justified - AT
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Capital gain computation - valuation of property - Valuation report of DVO, after all, cannot be treated as the last word on valuation, and there has to be a grievance redressal mechanism against incorrectness of the DVO’s valuation- particularly when the DVO has not properly disposed of the objections of the assessee. It is abundantly clear from the precedents cited above, that correctness of a DVO’s report can be challenged by the assessee. - AT
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Estimation of income - bogus purchases - CIT(A) appreciated to estimate the disallowance @ 3% instead of 2.5% proposed by AO and we observe that the revenue is in appeal objecting the findings of Ld. CIT(A). Therefore, we dismissed the Ground No. 1 raised by the revenue that AO cannot apply any other method other than estimating the disallowance on alleged purchases. - AT
IBC
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Condonation of delay in filing application - fresh claim in CIRP - The prospective Resolution Applicants submitted their Resolution Plan on the basis of their financial capacity and availability of funds. There is every likelihood that, if the claims of the different creditors are being accepted in a phase manner and/or on such belated stage, that too after the stipulated time, so provided for submitting claims, in that event, the Resolution Plans can never get materialized and there would be no resolution of Corporate Debtor which is main object of the IB Code, more so, when CIRP is to be completed in a time bound manner. - Tri
PMLA
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Release of provisionally attached properties - the order passed under Section 5(1) of PMLA, provisionally attaching the property is subject to confirmation by the Adjudicating Authority under Section 8(3) of PMLA. It is only after confirmation of the attachment order, the property attached can be taken possession of - this Court is not inclined to inter-meddle with the proceedings initiated by the Enforcement Directorate in conformity with the provisions of PMLA, in exercise of PIL jurisdiction. - HC
SEBI
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Fees which can be charged by Investment Advisers from their clients - SEBI is an expert regulatory body established under the SEBI Act and the Court, therefore, would have to exercise judicial restraint and the scope of interference would be extremely narrow. The Court cannot substitute own views in place of views of the expert body. Moreover, it is well settled that the Court should be very slow in staying a law by way of interim relief when the constitutional validity of the law is challenged. - HC
Articles
Notifications
Customs-
Ad hoc Exemption Order No. 4/2021-Customs - dated
3-5-2021
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Cus
Seeks to exempt IGST on imports of specified COVID-19 relief material donated from abroad, up to 30th June, 2021.
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30/2021 - dated
1-5-2021
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Cus
Seeks to reduce IGST on Oxygen Concentrators when imported for personal use.
GST-
14/2021 - dated
1-5-2021
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CGST
Seeks to extend specified compliances falling between 15.04.2021 to 30.05.2021 till 31.05.2021 in exercise of powers under section 168A of CGST Act.
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13/2021 - dated
1-5-2021
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CGST
Central Goods and Services Tax (Third Amendment) Rules, 2021
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12/2021 - dated
1-5-2021
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CGST
Seeks to extend the due date of furnishing FORM GSTR-1 for April, 2021
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11/2021 - dated
1-5-2021
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CGST
Seeks to extend the due date for furnishing of FORM ITC-04 for the period Jan-March, 2021 till 31st May, 2021.
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10/2021 - dated
1-5-2021
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CGST
Seeks to extend the due date for filing FORM GSTR-4 for financial year 2020-21 to 31.05.2021
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09/2021 - dated
1-5-2021
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CGST
Seeks to amend notification no. 76/2018-Central Tax in order to provide waiver of late fees for specified taxpayers and specified tax periods
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08/2021 - dated
1-5-2021
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CGST
Seeks to provide relief by lowering of interest rate for the month of March and April, 2021
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01/2021 - dated
1-5-2021
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IGST
Seeks to provide relief by lowering of interest rate for the month of March and April, 2021
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01/2021 - dated
1-5-2021
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UTGST
Seeks to provide relief by lowering of interest rate for the month of March and April, 2021
Income Tax-
41/2021 - dated
3-5-2021
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IT
Income-tax (13th Amendment) Rules, 2021 - New Rule 11UD. Thresholds for the purposes of significant economic presence.
Circulars / Instructions / Orders
News
Case Laws:
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GST
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2021 (5) TMI 94
Grant of Anticipatory Bail - valid and genuine purchases or not - HELD THAT:- Perusal of the anticipatory bail application does not bring out any material or reason to believe that any such inference is being drawn or is being sought to be drawn by the revenue authorities against the applicant, presently. Merely because the applicant has been called upon to participate in the inquiry against M/s. G.K. Traders, does not involve an automatic accusation against the applicant and it also does not involve the risk of his arrest. At present, the applicant claims that he had made genuine purchases from the said M/s. G.K. Traders for which he had made payments and had thereafter sold the goods to third parties. Accordingly, leaving it open to the applicant to lead such evidence before the revenue authorities, at present, no real apprehension is found to exist of the applicant being arrested - Application rejected.
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2021 (5) TMI 88
Refund of amount collected as penalty - impugned order does not stipulate even basic details such as the date and time of hearing - no reasons set out for the conclusion arrived at by the authority - HELD THAT:- Though the show cause notice and the impugned order are entirely non-speaking and contain blanks, which vitiate them in full, the statement of the driver recorded in Form-GST MOV-01 contains the observation that ' the goods moved from Chennai to Ambur, which is unregistered place of buyer as per invoices the destination place is mentioned as Ambur but as per E-Way bill delivery address mentioned as Bhosari, Maharashtra. ' - The detention order under Section 129(3) of the Act also contains the reasons for detention of the goods as aforesaid. Liberty is granted to the respondent to issue notice afresh, hear the petitioner and pass a speaking order in regard to the levy of penalty, de novo . Let this exercise be completed within a period of six (6) weeks from today - petition allowed.
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2021 (5) TMI 85
Non-compliance with the mandatory pre-deposit before filing of appeal - Section 107(6)(b) of the CGST Act, 2017 - HELD THAT:- The petitioner shall make the mandatory pre-deposit @ 10% on the amount of tax in dispute as envisaged under Section 107(6)(b) of the CGST Act, 2017 within the period of 15(fifteen) days from today with the Joint Commissioner (Appeals). Petition disposed off.
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Income Tax
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2021 (5) TMI 93
Characterization of receipts - Revenue or capital receipt - proceeds realized by the assessee on sale of Certified Emission Reduction Credit earned on the Clean Development Mechanism in its wind energy operations - HELD THAT:- As relying on S.P.Spinning Mills Pvt. Ltd [ 2021 (1) TMI 1081 - MADRAS HIGH COURT] and Ambika Cotton Mills Ltd [ 2014 (3) TMI 428 - ITAT CHENNAI] wherein held that carbon credit receipts cannot be considered as business income and it is a capital receipt. Hence, the assessee's claim under Section 80IA of the Act is untenable, as deduction under Section 80IA of the Act is allowable only on profits and gains derived by an undertaking. Thus the questions of law are decided against the Revenue and in favour of the assessee.
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2021 (5) TMI 92
Characterization of receipts - Revenue or capital receipt - proceeds realized by the assessee on sale of Certified Emission Reduction Credit earned on the Clean Development Mechanism in its wind energy operations - HELD THAT:- As relying on S.P.Spinning Mills Pvt. Ltd [ 2021 (1) TMI 1081 - MADRAS HIGH COURT] and Ambika Cotton Mills Ltd [ 2014 (3) TMI 428 - ITAT CHENNAI] wherein held that carbon credit receipts cannot be considered as business income and it is a capital receipt. Hence, the assessee's claim under Section 80IA of the Act is untenable, as deduction under Section 80IA of the Act is allowable only on profits and gains derived by an undertaking. Thus the questions of law are decided against the Revenue and in favour of the assessee.
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2021 (5) TMI 91
Validity of reopening of assessment - assessee has claimed loss on transfer of shares from trading to investment - Assessee contended that the element of reasons to believe as contemplated under Section 147 of the Income Tax Act is absolutely missing in the present case - HELD THAT:- The source of information may be irrelevant for the purpose of initiation of proceedings under Section 147 of the Act. Section 147 unambiguously enumerates that if the Assessing officer has reason to believe that any income chargeable to tax has escaped assessment for any Assessment Year. The escaped assessment includes even the subject matters considered in the assessment, which all are escaped, the word escape undertakes that it is not only the materials, which were not adjudicated during the original assessment but the materials adjudicated and certain aspects escaped from assessment during such original assessment. Thus, it is made clear that even the material facts, which all are provided by the assessee during the original adjudication and the Assessing Officer also passed an order under Section 143(3)of the Act, thereafter, if any materials are made available to establish that any income chargeable to tax has escaped assessment for the assessment year, then the Assessing officer is well within his power to institute proceedings under Section 147 of the Act. It is insufficient that the assessee has compared the reasons stipulated in the order by the respondents with reference to certain informations provided in the original assessment order. Beyond such comparable factors, with reference to the original assessment order and the reasons furnished for reopening of assessment, the Assessing Officer, if found any new materials, which were not considered, though provided, constitute a cause for 'reason to believe' regarding the income escaped assessment, then also the Assessing Officer is empowered to reopen the assessment by invoking the powers under Section 147 of the Act. Undoubtedly, the informations or materials etc., for reopening of the assessment must be new and not considered by the Assessing Officer during the original assessment. However, the word 'New' does not mean that there is an impediment to cull out the new facts from the informations or materials provided by the assessee at the time of original assessment. The very purpose and object of the proviso under Section 147 is to ensure that the assessee pays the income tax in the manner prescribed under the Statute and therefore, the Courts are expected to be cautious, while dealing with such intricacies and the disputed facts, which all are to be adjudicated by the competent authority by following the procedures as contemplated. High Court shall scrutinize the processes, through which, a decision is taken by the competent authorities with reference to the provisions of the Statute and the established principles and certainly, not the decision itself. Roving enquiry cannot be undertaken by the High Court in a writ proceedings under Article 226 of the Constitution of India. Thus, this Court has no hesitation in forming an opinion that the petitioner has not made out any acceptable ground for the purpose of interfering with the initiation of proceedings for reopening of assessment under Section 147 of the Income Tax Act. Accordingly, the Writ Petition fails and stands dismissed
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2021 (5) TMI 87
Stay of recovery of demand - Non-payment of disputed arrears of tax - No application for stay of the disputed tax appears to have been filed, either before the Assessing Authority for not being treated as assessee in default in terms of Section 220 (6) of the Act or seeking interim protection before the Administrative/Appellate Commissioner - petitioners have thus approached this Court seeking a mandamus forbearing the respondents from taking coercive action as threatened - HELD THAT:- There is no merit in the prayer sought for, insofar as the demand raised in the orders of assessment is, admittedly, payable till such time it is stayed either by the Assessing Authority or by any superior authority. The petitioners have not even filed an application seeking stay. In such circumstances, there is no justification for the prayer sought in these Writ Petitions, and hence the same are dismissed. The petitioners, however, may, if they so desire, approach the appropriate authority seeking interim protection and if any such application seeking interim protection is filed, let the same be disposed in accordance with law and in line with the parameters stipulated in this regard within a period of four (4) weeks from date of receipt of the same.
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2021 (5) TMI 81
Denial of approval U/s 80G(5)(vi) - aims and objectives of the assessee as religious in nature - assessee moved an application in Form 10G for grant of approval U/s 80G - assessee Trust was created on 19/10/1964 and is registered U/s 12AA of the Act since 01/03/1976 - HELD THAT:- Trust established Geeta Bhawan to provide accommodation to Sadhus, Saints and Priests for the propagation and dissemination of Dharmik Shiksha. From the aforesaid object, it is very much clear that the accommodation was provided to those persons who were propagating and disseminating Dharmik Shiksha in the society as a whole and not to a particular community or religion. Moreover, the said persons are also not related to a particular religion or community of the society - it cannot be said that the objects of the assessee were religious in nature. Moreover, the assessee had been granted registration U/s 12AA of the Act since 01/03/1976, only after considering this fact that the objects of the assessee Trust were charitable in nature. In the present case, it is not brought on record that the said registration granted to the assessee was set aside, therefore, if there is no change in the objects of the assessee Trust which were considered to be charitable while granting registration U/s 12AA of the Act then it cannot be said that the same objects were not charitable in nature while granting approval U/s 80G. Thus we are of the view that the ld. CIT(E) was not justified in rejecting the application of the assessee moved for grant of approval U/s 80G - Decided in favour of assessee.
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2021 (5) TMI 80
Unexplained investment u/s 69 - HELD THAT:- Upon perusal of the entire set of documents as made available before us it is ascertained that payment were made to TIPL through banking channel. AO has failed to disprove such facts. The statement of TIPL confirming the payment of ₹ 3.50 crores made by the appellant supported by corroborating evidence being the return of income and the balance sheet of the year under consideration keeps no scope of questioning the genuineness of the payment made by the appellant. The source of payment made by the appellant has neither been doubted by the Ld. AO. Therefore, under the circumstances the provisions of Section 69 of the Act are not applicable in the absence of primary condition for invoking the said section that the investment made is not recorded in the books of accounts The ratio laid in the case of CIT vs. M.B. Patel [ 2013 (11) TMI 527 - GUJARAT HIGH COURT] is rightly applicable to the instant case; the investment made by the assessee were duly shown; the source of investment as made from the assessee s account has neither been doubted by the Ld. AO. The plea of the Ld. AO of not being able to verify the genuineness of the transaction with TIPL in their absence cannot be said to be justified when all other evidences speak otherwise. The appellant company and the confirming parties as well regularly assessed to tax and the amount received is duly reflected in their books of accounts. Neither it is the case of the revenue that the declaration made by the confirming party through its director is false and, therefore, considering entire aspect of the matter the addition on account of unexplained investment is not sustainable in the eye of law fact of which has rightly been taken care of by the Ld. CIT(A) while deleting addition - Decided against revenue..
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2021 (5) TMI 79
Addition u/s 68 - treating the gifts received by the assessee during the year under consideration as unexplained cash credit - HELD THAT:- All the four donors who had given the gifts in question to the assessee during the year under consideration were engaged in the business and in the returns of income filed regularly for the year under consideration, the business income earned by them was duly declared as is evident from the photocopies of their IT return acknowledgement. Moreover all the gifts in question were given to the assessee by the four donors by account payee cheques and their declarations confirming the gifts given to the assessee were also furnished on record giving all the relevant particulars including the Permanent Account Number of the donors. As rightly contended by the learned counsel for the assessee, the primary onus to establish the identity and creditworthiness of the concerned donors as well as the genuineness of the relevant transactions involving gifts thus was duly discharged by the assessee by producing the relevant documentary evidence and without bringing on record any material or evidence to disprove or dislodge the claim of the assessee, the authorities below were not justified in treating the gifts received by the assessee as unexplained cash credit u/s 68 merely on the basis of doubts and suspicion - Decided in favour of assessee.
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2021 (5) TMI 77
Invocation of provisions of section 153A - HELD THAT:- A Search was conducted in case of the appellant on 05.07.2017. The appellant filed original Return of Income on 06.02.2018 returning income of ₹ 31,52,080/- Notice u/s.153A was issued on 19.02.2018 and Return of Income in response to notice u/s 153A was filed on 25.09.2018 admitting income. The appellant included additional income admitted during the course of Search. Since this is not a concluded assessment, the contentions raised by the appellant as to 'absence of incriminating material' are not relevant to facts of the case. Accordingly, the grounds raised is rejected. Admission additional income u/s 132(4) - HELD THAT:- We are of the view that only real income should be brought to tax. Once the income has not accrued to the assessee, no tax can be charged on the notional income. We are of the view that there is no basis for addition as there was no separate declaration in detail i.e., year-wise, head-wise, group concern-wise and quantities etc. during the course of search and seizure operation, which forms the basis for making addition. From the statements of the assessee as quoted above, there is no real income accrued in the hands of the assessee. Therefore, we set aside the order of the CIT(A) and allow the grounds raised by the assessee on this issue. Unexplained cash deposits u/s 68 - HELD THAT:- As observed that while examining the books of account produced before us i.e. copy of ledger and the cash book, we find that the assessee has sufficient cash balances, which has not been rejected by the lower authorities and also on the date of deposit of the cash into bank, there was sufficient cash balance available, therefore the explanation of the assessee was accepted on this issue. Accordingly, we uphold the order of the CIT(A) in deleting the addition made by the AO towards unexplained cash deposits u/s 68 of the Act and dismiss the Cross objections raised by the revenue on this issue.
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2021 (5) TMI 76
Excess Depreciation on windmills purchased and installed on or after 01.04.2012 - eligible for depreciation @ 15% or 80% as claimed by the assessee - HELD THAT:- In this case, there is no dispute with regard to the fact that windmills were installed on or before 31.03.2012. It is an admitted fact that the assessee has purchased used windmills on as is where is basis for the financial year 2013-14. Therefore, once the windmills are installed before 31.03.2012, then rate of depreciation is applicable as per pre-amended Appendix-I of Rule 5 of Income Tax Rules,1962. Further, as per said rule, rate of depreciation on windmills which are acquired and installed on or before 31.03.2012 is at 80%. Therefore, the Assessing Officer as well as learned CIT(A) erred in coming to the conclusion that assessee became owner of windmills only after 31.03.2012 and entitled for depreciation as per amended rate, when the law is very clear about installation of windmills and acquisition of asset is immaterial to claim depreciation. In this case, since the windmill was acquired and installed on or before 31.03.2012 and assessee has became second owner and has not dismantled from one place and reerected in another place, the interpretation given by the Assessing Officer and learned CIT(A) are contrary to the provisions of Rule 5 of Income Tax Rules,1962. Hence, we set aside the order of the learned CIT(A) and direct the Assessing Officer to allow depreciation @ 80% on windmills as claimed by the assessee. Appeal filed by the assessee is allowed.
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2021 (5) TMI 75
Revision u/s 263 - Whether assessee has duly discharged the onus at the time of regular assessment by providing various details in support of export rate difference loss as well as profit from speculation business? - HELD THAT:- The amendment brought by the Finance Act, 2015, by way of insertion of Explanation-2, can come to the aid of the ld. Pr. CIT only when any one or more of the four conditions, is satisfied and a clear finding of fact to that effect is recorded by the Ld. PCIT. It is only after the PCIT records a clear finding of fact bringing the assessee s case within the ambit of any one or more condition specified in the explanation, only then the legal consequence envisaged in the explanation can be deemed or else it cannot be deemed. Only in the case where the PCIT records a clear finding of fact establishing any of the four conditions postulated above is satisfied then the order framed by the AO can be deemed to be erroneous insofar as prejudicial to the interest of the Revenue, and not otherwise. To say it differently, the opinion of Ld. Pr. CIT cannot be read in isolation, and it has to be read co-jointly with the four conditions stipulated under Explanation-2 clauses (a) to (d) . It is only in the event that any one of the situation is satisfied and there is a finding of fact by the Ld. PCIT to that effect in his revision order, then only the deeming provision of Explanation-2 can be pressed into service for rendering an assessment order as erroneous, insofar as prejudicial to the Revenue, which is the jurisdictional fact and law required for the ld. Pr. CIT/CIT to invoke revisional jurisdiction u/s 263. In the assessee`s case, the assessee submitted various documents and evidences, as noted by us in para no.15 of this order, to prove the exchange rate taken by him and explained the exchange rate difference stating that as a matter of consistency, the assessee has been using CBIC exchange rate to convert the UD dollar into Indian rupee. All the exchange gain or loss are related to business activities, as the assessee has taken forward contract to guard the losses. There is no any speculation activity in the assessee`s business, the accountant has used wrong nomenclature in books of accounts. We note that for working of foreign exchange gain or losses, the Ld. Pr. CIT set out specific reasons for which he had considered the AO s order to be erroneous in so far as prejudicial to the interests of the Revenue. We note that in response, the assessee had submitted before the Ld. Pr. CIT detailed explanations supported by tangible documentary evidence to prove that ld PCIT had proceeded on assumption of some incorrect facts and wrong interpretation of applicable legal provisions. The assessee also explained with cogent material that before completion of assessment, the AO had indeed made enquiries with reference to specific issues raised by the ld PCIT. According to Ld. Counsel, on receipt of the objections from the assessee, the Ld. Pr. CIT ought to have examined the assessment records and conducted his own enquiry and thereafter should have recorded his own finding proving that the explanations furnished by the assessee suffered from any factual or legal infirmity and because of which he found that the view adopted by the AO was unsustainable in law making his order as erroneous within the meaning of Section 263 of the Act. In our opinion, once the ld. PCIT initiates the proceedings u/s 263 of the Act for specific reasons and these reasons are met by the assessee, then it is incumbent upon the ld. PCIT to himself independently deal with the objections and record his own satisfaction to prove that the AO s order is in fact erroneous and prejudicial to the interests of the Revenue for the reasons as mentioned above. The ld. PCIT in such a situation cannot merely set aside the assessment order directing AO to pass the order of assessment afresh, effectively giving the AO a second innings without establishing that the initial order was erroneous as well as prejudicial to the interests of the Revenue. Assessee had to bear the loss as value of US dollar increased over the period since receipts of the remittance and date of export. In most of the cases of the remittance, assessee utilized the forward exchange contract made in the last year where value of the US$ was fixed which is lower than the value of US$ on the date of actual remittance. Considering the aforesaid facts it is seen that AO had made full inquiries by raising the queries with respect to the issue under consideration and the same were also replied by the assessee and on receipt of the replies accepted the claim of the assessee. We further find that Hon'ble Apex Court in the case of CIT v. Max India Ltd. [ 2007 (11) TMI 12 - SUPREME COURT] has held that where two views are possible and the ITO has taken one view with which the CIT does not agree, it cannot be treated as an erroneous order prejudicial to the interest of Revenue, unless the view taken by the ITO is unsustainable in law. Before us, Revenue has not brought any material on record to demonstrate that the view taken by the AO was an impermissible view and was contrary to law or was upon erroneous application of legal principles necessitating the exercising of Revisionary powers u/s 263 of the Act. If an Income-tax Officer acting in accordance with law makes a certain assessment, the same cannot be branded as erroneous by the Commissioner simply because, according to him, the order should have been written more elaborately. In the instant case, the Ld Pr. CIT has simply expressed the view that the assessing officer should have conducted enquiry in a particular manner as desired by him. Such a course of action of the Ld Pr. CIT is not in accordance with the mandate of the provisions of section 263 of the Act. A mere observation that no proper details have been obtained, cannot be sufficient to come to a conclusion that the AO did not make proper and adequate inquiries which he ought to have made in the given facts and circumstances of this case. In the conclusion we are of the view that none of the reasons set out by the ld PCIT for invoking the jurisdiction u/s 263 of the Act are sustainable. We accordingly quash the order u/s 263 of the Act and allow the appeal of the assessee
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2021 (5) TMI 73
Penalty u/s 271B - non-filing of Tax audit report u/sec. 44AB of the Act within the due date under section 139(1) - HELD THAT:- As per the provisions, the return of income along with tax audit report has to filed on or before 30.09.2013 for the said Assessment Year. Whereas The CBDT has issued notification by extending the due date, as per the order under section 119 of the Act from 30.09.2013 to 31.10.2013. The assessee firm has made submissions before the ld. CIT(A) that there is a marginal delay of 29 days in submitting the Tax Audit Report and filing the income tax return and there is no Wanton Act for the delay. We find the explanations that the assessee is a Chartered Accountants firm and dealing in auditing of books of Accounts of the Trust. In this particular Assessment Year, the return of income of the Trust have to filed electronically with the Income Tax Department's website. And due to technical issues and pressure of work, the assessee firm could not file their return of income within the due date specified under section 139(1) - Thus the delay is filling is not a wanton act and the explanations has a reasonable cause. Accordingly, we set-aside the order of ld. CIT(A) and direct the Assessing officer to delete the penalty - Decided in favour of assessee.
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2021 (5) TMI 72
Addition u/s 68 - Unexplained cash deposits - HELD THAT:- CIT(A) and the Ld. A.O. had posted the case on several occasions. However, none appeared on behalf of the assessee before the Ld. AO as well as before the Ld. CIT(A). Therefore, the Ld. Revenue Authorities were left with no other option except to adjudicate the appeal based on the material available on record. In this situation, do not find much strength in the arguments advanced by the ld. AR. However, considering the issues involved in the appeal as well as the prayer of the Ld. AR, in the interest of justice, hereby remit the matter back to the file of Ld. A.O. in order to consider the appeal afresh on merits by providing one more opportunity to the assessee of being heard. Appeal filed by the assessee is allowed for statistical purposes
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2021 (5) TMI 71
Addition in respect of excise duty u/s. 69C - AO observed that the return clearly shows that assessee has already CENVAT credit to the assessee's credit and they had paid the excise duty out of this credit available to them and the assessee company had not paid out of its book for the current year under consideration i.e., FY 2010-11 - CIT(A) observed that the assessee had not submitted whether these CENVAT payments had been during the FY and the same should be allowed as revenue expenditure in the year in which the payment is made and he upheld the addition made by the AO - HELD THAT:- As per Section 43B(a) of Income Tax Act, deduction is allowed on any sum payable by the assessee by way of tax, duty, cess or fee. The credit of Excise Duty earned by the assessee under MODVAT scheme as per Central Excise Rules, 1944 is not sum payable by the assessee by way of tax, duty, cess. The scheme under Section 43B is to allow deduction when a sum is payable by assessee by way of tax, duty and cess and had been actually paid by him. Furthermore, the deductions under Section 43B is allowable only when sum is actually paid by the assessee. In the case on hand, the AO says the assessee had not paid ₹ 87,70,509/- out of its books for the impugned AY whereas the assessee says when the assessee submitted the excise returns for the FY 2010-11, it is evident that the expenditure had been genuinely incurred. In these facts and circumstances of the case, we remit the issue to the file of the AO with a direction to ascertain whether the assessee has paid the said amount or not and decide the issue in accordance with law. The assessee is directed to substantiate its claim by way of filing documentary evidence before the AO. Thus, the grounds raised on this issue are treated as allowed for statistical purposes. Addition u/s. 69C in respect of the assessee creditors - AO noticed that the assessee had taken unsecured loans form the following creditors and when the AO called for information from the, he noticed that there were huge differences in amounts payable by the assessee and receivables by the creditors - HELD THAT:- It is not clear as to whether the difference in amounts arisen are related to the current year or carried forward from the previous year. If the difference in amounts are related to the previous year, the addition cannot be made in the current year. If the difference in amounts are arisen during the current year, addition can be after affording proper opportunity of being heard to the assessee to reconcile the difference in amounts for the year under consideration. Therefore, in our considered opinion and in the interest of justice, we restore the matter back to the file of the AO with a direction to reconcile the amounts payable by the assessee and receivable by the creditors for the year under consideration. Thus, this ground of appeal is allowed for statistical purposes. Addition u/s. 68 on account of additions made to fixed assets - AO noted that the assessee had not produced the bills/invoices for the addition made to fixed assets - HELD THAT:- Since before us also the assessee has not substantiated its case by way of documentary evidence, we remit this issue to the file of AO to decide the issue in accordance with law after providing reasonable opportunity of being heard to the assessee in the matter. The assessee is directed to substantiate its claim by way of filing documentary evidence before the AO. This ground is allowed for statistical purposes. Addition u/s. 35D on account of ROC filing fee - assessee submitted that the said expenditure is only a revenue expenditure incurred wholly and exclusively for the purpose of business and is to be allowed u/s. 37(1) - HELD THAT:- Perusing the material on record, in the case Brooke Bond India ltd. [ 1997 (2) TMI 11 - SUPREME COURT] held that the amount paid in increase of authorized share capital is in nature of capital expenditure which cannot be allowed as deduction u/s. 37(1) of the Act. Since the amount paid by the assessee for increasing the authorized share capital, we do not find any infirmity in the order of the CIT(A) in upholding the order of AO for making disallowance treating it as capital expenditure. Accordingly, we uphold the order of CIT(A) and dismiss the ground raised by the assessee. Claim of bad debts as per the revised computation annexed - HELD THAT:- This issue has not been raised before the revenue authorities as it is raised for the first time before us relying on the decision of Hon'ble Supreme Court in the case of National Thermal Power Co., Limited Vs. CIT [ 1996 (12) TMI 7 - SUPREME COURT] - The assessee has raised this ground before us for the first time for claiming bad debts and in support of the same, the assessee has produced some additional evidences vide its letter dated 16/01/2019 as well as relied on some case law, which are placed in the paper book - To meet the ends of justice, we accept the additional evidences and remit the matter back to the file of AO for fresh adjudication. Accordingly, this ground is allowed for statistical purposes.
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2021 (5) TMI 70
Revision u/s 263 - addition u/s. 68 of the Act as unexplained cash credit being share application money and premium received by the assessee during the year - HELD THAT:- As specifically applying the decision of the Tribunal in the case of M/s. Amritrashi Infra Private Ltd.. [ 2020 (8) TMI 407 - ITAT KOLKATA] and in the case of M/s. Omkar Infrastructure Pvt. Ltd. [ 2020 (5) TMI 209 - ITAT KOLKATA] to the facts of the case on hand, we have to necessarily hold that the exercise of revisionary power by the ld. Pr. CIT, u/s. 263 of the Act, vide order dt. 27/03/2019, is bad in law. Assessing Officer in the second round of assessment proceedings, has followed all the instructions given by the ld. Pr. CIT in his first order passed u/s. 263 of the Act on 07/09/2016. This is not a case of non-enquiry or non-application of mind. The Assessing Officer has examined all the evidences and taken a possible view. Just because the total income determined by the Assessing Officer in the second round of assessment proceedings, is less than the income determined in the first assessment proceedings, the order does not become erroneous. In adequate enquiry does not warrant invocation of powers u/s. 263 of the Act. Hence we quash the same and allow the appeal of the assessee.
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2021 (5) TMI 69
Dismissal of appeal of the assessee for non-prosecution - order passed ex-parte - Validity of assessment - notice under section 142(1) as well as the subsequent letters were issued by the Assessing Officer during the course of assessment proceedings to the wrong address - HELD THAT:- Assessee has submitted that the notice under section 142(1) as well as subsequent letters stated to be issued by the Assessing Officer during the course of assessment proceedings thus were not received by the assessee and even the notices stated to be issued by the ld. CIT(Appeals) fixing the appeal of the assessee for hearing from time to time were never served on the assessee as is clearly mentioned in para no. 2 of the impugned order of the ld. CIT(Appeals), we find merit in the contention of the ld. Counsel for the assessee that proper and sufficient opportunity of hearing was not given to the assessee either by the Assessing Officer during the course of assessment proceedings and even by the ld. CIT(Appeals) during the course of appellate proceedings. D.R. has also not been able to dispute this position, which is clearly evident from the record. We, therefore, find it just and proper to set aside the orders passed by the authorities below and restore the matter to the file of the Assessing Officer for completing the assessment afresh after giving proper and sufficient opportunity of being heard to the assessee.Appeal of the assessee is treated as allowed for statistical purposes.
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2021 (5) TMI 68
Reopening of assessment u/s 147 - Addition on account of sale of investment in unquoted shares by treating the same as unexplained cash credit - As submitted that the entire amount of share capital and share premium received in A.Y. 2008-09 was added by the Assessing Officer to the total income of the assessee by treating the same as unexplained cash credit and the assessee has already settled the said controversy involved in A.Y. 2008-09 by opting Vivad Se Vishwas Scheme - HELD THAT:- Keeping in view the submissions made by the ld. Representatives of both the sides and having regard all the facts of the case, we consider it just and proper to restore this issue to the file of the Assessing officer for verifying the claim of the assessee from the relevant record. If it is found by the Assessing Officer on such verification that the amount in question represents the sale proceeds of investments which were made by the assessee out of share capital and share premium amounting to ₹ 11.04 crores, which is already treated and accepted as income of the assessee by virtue of the settlement of dispute under Vivad Se Vishwas Scheme in A.Y. 2008-09, the same cannot be treated as income of the assessee again for the year under consideration as the same would amount to double addition. Appeal of the assessee is treated as partly allowed for statistical purposes.
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2021 (5) TMI 67
Reopening of assessment u/s 147 - addition u/s 68 - A.O. received information from DDIT (Inv.), Unit 7(4), Mumbai that a person named Shri Vipul Vidur Bhat has floated bogus entities and provided accommodation entries by way of bogus loan entries and assessee herein has availed loan of ₹ 15 lakhs from the above said concern - HELD THAT:- A.O. has made the addition on the basis of information received from DDIT, Mumbai and he did not examine the explanations given by the assessee vis-a-vis the books of accounts. A.O. was not justified in making the addition wholly placing reliance on the statement given by Shri Vipul Vidur Bhat and without considering the explanations furnished by the assessee. In my view, the A.O. should have examined the ledger accounts of the assessee and also explanations furnished by it, surrounding circumstances etc. to find out the genuineness of the transactions. A.O. should have provided opportunity for cross examination. Under these set of facts, this issue requires fresh examination at the end of the A.O. Accordingly restore this issue to the file of the A.O. with a direction to examine it afresh after affording adequate opportunity to the assessee - Decided in favour of assessee for statistical purposes.
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2021 (5) TMI 64
Disallowance of claim u/s. 35(1)(ii) - donation made to Herbicure Healthcare Bio Research Foundation (HHBRF) - AO stated the donation made by the assessee to Herbicure Healthcare Bio Research Foundation (HHBRF) was no longer valid in view of the notification of Ministry of Finance dated 6th Sep, 2016 which had withdrawn approval given u/s. 35(1)(ii) of the Act to HHBRF - HELD THAT:- Identical issue on identical facts has been decided in favour of the assessee by ITAT Ahmedabad in the case of ACIT vs. M/s. Thakkar Govindbhai Ganpatlal [ 2019 (7) TMI 1559 - ITAT AHMEDABAD] - The ld. counsel has reported that aforesaid decision of the ITAT was also confirmed by the Hon ble High Court of Gujarat in the case of Principal CIT-3 vs. M/s. Thakkar Govindbhai Ganpatlal HUF, [ 2020 (2) TMI 31 - GUJARAT HIGH COURT] . The ld. Departmental Representative could not controvert these undisputed facts reported by the ld. counsel that the issue is covered in favour of the assessee by the aforesaid decision of the ITAT and Hon ble High Court of Gujarat - Appeal of the assessee is allowed.
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2021 (5) TMI 62
Exemption u/s.11 - assessee club is not covered by the principle of mutuality thereby violating provisions of section 13 which disentitles the trust from claiming exemption u/s. 11 - HELD THAT:- The Hon'ble Bombay High Court in the case of DIT vs Goregaon Sports Club [ 2012 (4) TMI 214 - BOMBAY HIGH COURT ] held that providing sports facilities to general public without restriction to any caste, creed, religion or profession is eligible for exemption u/s 11 of Income-tax Act, 1961. In this view of the matter and respectfully following the ratio of The Pransukhlal Mafatlal Hindu Swimming Bath Boat Club Trust [ 2018 (7) TMI 2043 - ITAT MUMBAI ] assessee is eligible for exemption u/s 11 of the Income-tax Act, 1961. - Decided in favour of assessee.
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2021 (5) TMI 61
Disallowance u/s 14A rws 8D(2)(iii) - HELD THAT:- We set aside the order of the CIT(A) and remit the matter back to the file of AO with a direction to decide the issue following the said case of Maxopp Investment Ltd [ 2018 (3) TMI 805 - SUPREME COURT] We further direct the AO that the disallowance should be made under rule 8D(2)(iii) @ 0.5% on the average value of the investment in which exempt income has been received. Therefore, the grounds raised in both the appeals are treated as allowed for statistical purposes.
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2021 (5) TMI 60
Income from other sources u/s 56(2)(vii)(b) - adopted the fair market value of the property as determined by the stamp duty authority and made addition to the extent of assessee s share in the land - AR submitted that the provision of section 56(2)(vii)(b) of the Act are not attracted as agriculture land does not fall within the definition of capital assets - whether the agriculture land falls within the meaning of property as defined in Explanation to section 56(2)(vii) of the Act? - HELD THAT:- A bare perusal of the definition of property shows that it is an inclusive definition. The expression property includes capital asset of the assessee. The term capital asset has been defined under section 2(14) of the Act. The capital asset does not include agriculture land, however, there are certain exceptions to it. In the present case, we find that the assessee has not brought any evidence to show that the agricultural land purchased with other co purchasers does not fall within the exceptions as specified in definition of agricultural land under section 2(14) of the Act. Even the AO has not made any effort to examine whether the agricultural land in question falls within the exception as specified under section 2(14) We find that in the case of Prem Chand Vs. ACIT [ 2020 (7) TMI 188 - ITAT JAIPUR ] held that per se the agriculture land does not fall within the definition of property as defined in Explanation to Section 56(2)(vii) of the Act. The Tribunal referred the issue back to the file of AO to examine whether the land in question falls under any of the exceptions provided in section 2(14). AR during the course of his submission stated that in case the issue is restored back to the AO for determination of the fact, that the agriculture land falls under exception or not, and in case the agriculture land purchased by the assessee falls within the definition of the capital asset and consequently, the provisions of Section 56(2)(vii) of the Act are attracted, then the AO may be directed to refer the valuation of land to the DVO. We have considered the contentions of the assessee, liberty is granted to the assessee to make a requisite application before the AO to refer valuation of land in question to DVO in case the agricultural land falls within the ambit of definition of property under section 56(2)(vii) of the Act. Appeal of the assessee is party allowed for statistical purposes
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2021 (5) TMI 59
Unexplained investment under section 69 - Before CIT(A), it was explained that someone else s cheques are fraudulently credited in the closed ledger account mentioned with the assessee s broker - assessee submitted that he closed the account - HELD THAT:- Assessee has filed a complaint with Bombay Stock Exchange in respect of unauthorized trade in assessee s account which was already closed. From the reply of advocate Dinesh Tiwari of Bombay Stock Exchange categorically stated that all the trades in the assessee s account were operated by some shah family and also the outstanding liability of ₹8.06 crores in the said account was taken over by one Mr. Mahesh C Shah. Also, in the letter from the broker to the BSE, it has been confirmed that payments in assessee s account has been received from Mr. Mahesh C Shah. Even, as per the Memorandum Of Understanding (MOU), which is signed between MK Shares and Stock brokers Ltd. and also Mahesh C Shah and his family, the outstanding liability of the assessee has been taken by Mr. Mahesh C Shah and this MOU is never signed by the assessee. It is also submitted that police complaint was filed against the said broker for unauthorized trade carried out towards assessee s account and misusing his name. We are of the view that the Assessing Officer could not understand the fraudulent transaction carried out by one Shri Mahendra Shah and made addition of unexplained investment amounting to ₹ 3,35 crores under section 69 of the Act in the hands of the assessee. Hence, we are of the view that the CIT(A) has rightly deleted the addition. We confirm the order of CIT(A) and this appeal of Revenue is dismissed.
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2021 (5) TMI 58
Penalty u/s. 271(l)(c) - long term capital gain income - Assessee argued that AO had not specified in the notice u/s.271(1)(c) r.w.s. 274 and in the penalty order whether the penalty was leviable for concealment of income or for furnishing inaccurate particulars thereof - HELD THAT:- We note that the assessing officer has initiated the penalty proceedings on one footing and concluded on other footing. Therefore, in our opinion, the basis of levy of penalty itself is not correct. The assessee company sold the land to Ambuja Cement for a consideration and out of the said receipt the bank loans were to be paid by the company. When this fact (that the said amount was not disclosed in the original return by way of capital gain) was drawn to the attention of the Director, Shri Rajendra Singh Yadav, he immediately and voluntarily offered the long term capital gain in the hand of the company by revising the return of income. The amount received from the transferee company of M/s Ambuja Cement has been shown by the assessee-company under the head loan and advances, hence, there is no conscious concealment of income, as held by the various Hon`ble High Courts These are the three varying degrees of defaults and the statute clearly keeps up the distinction between the three modes. In Hindustan Steel Ltd. v. State of Orissa [ 1969 (8) TMI 31 - SUPREME COURT] observed that whether the penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all relevant circumstances and that even if a minimum penalty is prescribed the authority competent to impose the penalty will be justified in refusing to impose a penalty when there is a mere technical or venial breach of the provisions of the Act. The words may direct that such person shall pay by way of penalty in section 271 leave a certain amount of discretion in imposition of penalty which need not be imposed when there is a minor breach of the law and when having regard do the facts ends of justice require that the assessee should not be penalized. So also where the circumstances of a case establish that the mistake is accidental and inadvertent and there is no material at all to justify any want of bona fide or any gross neglect, imposition of penalty is not justified.[ Mahadeshwara Movies [ 1980 (4) TMI 5 - KARNATAKA HIGH COURT] ] Therefore, in the assessee`s case the penalty is not leviable unless it is shown that there is a conscious concealment or furnishing of inaccurate particulars of income. Therefore, we delete the penalty imposed under section 271(1) (c ) of the Act. - Decided in favour of assessee.
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2021 (5) TMI 57
Capital gain computation - valuation of property - AO took into account the value of the property as on 01.04.1981 - reliability on Valuation report of DVO - HELD THAT:- We note that where the assessee objects before the assessing officer that value adopted by stamp valuation authority under section 50C(1) exceeds fair market value of property on date of transfer, assessing officer may either accept valuation of property on the basis of report of approved valuer filed by the assessee or he may refer question of valuation of capital asset to DVO in accordance with section 55A. We note that assessee has objected/challenged the DVO report during the assessment proceedings as well as appellate proceedings. Besides, the ld CIT(A) has also not considered the valuation report of Shri Ramesh Jain, submitted by the assessee, during the appellate proceedings. The ld CIT(A) ought to have considered the valuation report of Shri Ramesh Jain, submitted by the assessee and he must have disposed of the objections of the assessee in respect of DVO report, but he has failed to do so therefore it is against the principle of natural justice. Valuation report of DVO, after all, cannot be treated as the last word on valuation, and there has to be a grievance redressal mechanism against incorrectness of the DVO s valuation- particularly when the DVO has not properly disposed of the objections of the assessee. It is abundantly clear from the precedents cited above, that correctness of a DVO s report can be challenged by the assessee. We note that correctness of the DVO s report is to be examined on merits and there is no adjudication, on that aspect, by the CIT(A). Thus, Ld CIT(A) has to examine correctness of the DVO s report on merits after hearing both sides. Therefore, we deem it fit and proper to set aside the order of the ld. CIT(A) and remit the matter back to the file of the ld. CIT(A) to adjudicate the issue afresh on merits, in accordance with the scheme of the law, after giving a due and reasonable opportunity of hearing to the assessee as well as DVO.
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2021 (5) TMI 56
Estimation of income - bogus purchases - CIT(A) applied 3% on bogus purchase and deleted the addition made u/s 69C of the Act on account of peak credit of the transaction of bogus purchases - HELD THAT:- We notice from the record that Ld. CIT(A) has appreciated the whole facts in this case and given clear cut findings. It is finding on record by the AO that the purchases made by the assessee are unverified and falls under the category of bogus purchases and AO proceeded to make disallowance on the basis of presumed cash transaction and applied the peak credit in the case of purchase transaction. We notice that Ld. CIT(A) has correctly came to the conclusion that the correct way of dealing with bogus purchase issue is to estimate the profit margin on such purchases and not adding the entire amount of such purchases when the AO came to the conclusion that it is bogus purchases and by considering the decision of the various courts, AO can only disallow the estimated margin which assessee would have enjoyed in such practices of taking accommodation entries. We are in agreement with Ld. CIT(A) that AO cannot proceed to disallow the whole purchases or applied peak credit in cash transaction. However, we notice that Ld. CIT(A) appreciated to estimate the disallowance @ 3% instead of 2.5% proposed by AO and we observe that the revenue is in appeal objecting the findings of Ld. CIT(A). Therefore, we dismissed the Ground No. 1 raised by the revenue that AO cannot apply any other method other than estimating the disallowance on alleged purchases. CIT(A) has disallowed @ 3% whereas AO has disallowed @ 2.5% alonwith disallowing peak credit on cash transaction. Therefore, in our view, Ld. CIT(A) has proposed 3% is higher than the estimation made by AO. Accordingly, all the grounds raised by the revenue are dismissed. Validity of reopening of assessment u/s 147 - AO has taken sanction only from the then Addl. Commissioner instead of taking permission from Commissioner as per the provision of section 151(1) - HELD THAT:- In our considered view, the violation of section 151(1) of the Act is apparent on record and there is no necessity for this issue to go back to Ld. CIT(A) as submitted by Ld. DR. Respectfully following the decision in the case of Dhadda Exports [ 2015 (4) TMI 304 - RAJASTHAN HIGH COURT] and Ghanshyam K. Khabrani vrs. ACIT [ 2012 (3) TMI 266 - BOMBAY HIGH COURT] the AO has no jurisdiction to reopen the assessment, when there is violation to the statutory direction contained in section 151 of the Act. Accordingly, we allow ground no. 1 raised by the assessee
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Customs
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2021 (5) TMI 90
Release of delivery order and original bill of lading of re-import shipment to enable the release of the subject consignment in favour of the plaintiff subject to payment by the plaintiff within 3 days from the date of the order - ex-parte order - HELD THAT:- It is not in dispute that on the date when arguments on interim application were heard by the Ld. Trial Court, the reply filed by the contesting defendant nos. 5 and 6, was already on record but surprisingly in the impugned order not even one single sentence has been mentioned about the stand taken by the present appellants before the Ld. Trial Court and the impugned order dated 19.11.2020 was passed only on the basis of submissions made on behalf of the plaintiff without considering any argument advanced on behalf of the present appellants, who were vehemently opposing defending the said interim application - While going through the Bill of Lading, it has also come to our notice that Clause 25 provides for the territorial jurisdiction of only the Courts at Hamburg, Germany. The contract of shipping is to be governed by German law. It is worthwhile to mention that this Bill of Lading is available on the Ld. Trial Court s file and the same is relied upon by both the parties. The detailed written submissions filed by defendant nos. 5 and 6 running into 18 pages, were also on record of the Ld. Trial Court, in which specific reference has been made to the right of lien of the contesting defendants in respect of the goods and liability of the plaintiff (respondent no.1 herein) to make payments of all invoices raised in respect of goods in question. The Ld. Trial Court has failed to appreciate even one single argument of defendant nos. 5 and 6 while passing the impugned order. The said order, at its best, can be termed as an ex-parte order solely based upon the submissions of the plaintiff; passed without caring for the reply or the written submissions filed by defendant nos. 5 and 6, who have no option but to challenge the said order before this court by filing this appeal. Since, no findings have been given by the Ld. Trial Court on the stand of the contesting defendants nothing can be arrived at and the only option left is to remand the matter back to the Ld. Trial Court with a request to consider all the documents and pleadings qua the interim application as well as the written submissions filed by both the parties, and thereafter, decide the interim application under Order XXXIX Rule 1 and 2 of the Code of Civil Procedure, 1908 afresh by passing a detailed, reasoned order - The trial court is at liberty to set-aside, rescind, modify or reconfirm the impugned order dated 19.11.2020 without getting influenced by anything stated in the order hereinabove as we have not expressed any opinion on the merits of the case. Appeal allowed by way of remand..
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2021 (5) TMI 89
Grant of Anticipatory Bail - search procedure - allegation of gross under-valuation of the white paper roll imported - Allegation of Hawala Transactions as well - case of Revenue is that petitioner is a habitual offender - HELD THAT:- All the documents are in the custody of the Customs. When specifically asked as to why Customs Authorities require the custody of the petitioner, no specific answer is forthcoming. As stated earlier, all the documents are in custody of the Customs Department. This particular case involves violation of Section 132 and 135 of the Customs Act, 1962. The allegation that the petitioner is involved in transfer of money through non-banking/hawala channels is a subject matter of investigation by another authority and as and when and if and when investigation in this regard is initiated by other authorities to prove the involvement of the petitioner in the transfer of money through non-banking/hawala channels they can arrest the petitioner if a case is registered against him. Since this issue is not germane to the facts of the present petition, this Court is not inclined to go into this issue. The petitioner has been granted protection by this Court on 05.02.2021. The petitioner stated that he is prepared to join the investigation. Section 41A of the Cr.P.C provides that where the arrest of a person is not required under the provisions of Section 41(1), the Police Officer shall issue a notice directing the person against whom a reasonable complaint has been made, or credible information has been received, or a reasonable suspicion exists that he has committed a cognizable offence, to appear before him or at such other place as may be specified in the notice. If the petitioner is required for investigation then an appropriate notice under Section 41A can be given to him directing to appear/join the investigation. Bail granted subject to conditions imposed - application allowed.
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Corporate Laws
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2021 (5) TMI 74
Reduction of capital of the petitioner - Section 66 of the Companies Act, 2013 - HELD THAT:- The Authorized Share Capital of the Company is ₹ 1,50,00,000 divided into 15,00,000 Equity Shares of ₹ 10 each, which have been issued and have been fully paid-up or credited as fully paid. In compliance of the requirements of proviso to sub section 1 of Section 66 of the Companies, Act, 2013 the petitioner has filed a declaration dated 07.11.2020 affirming that the Petitioner Company as on date has not accepted any deposits and accordingly there is no arrears or repayment due with respect to deposits - Besides the certificate of statutory auditor dated 05.11.2020 has been placed on record which certifies that the accounting treatment proposed by the Company for the reduction of share capital is in conformity with the accounting standards specified under Section 133 or any other Provisions of the Act. Since all the requisite statutory procedures have been fulfilled and no objections received from the governmental authorities or any shareholders before this Tribunal, the Company Petition is made absolute and therefore the proposed reduction can be confirmed by passing order in terms of Rule 6 of the Rules - As per Section 66 (5) of Companies Act, 2013 the petitioner company shall deliver a certified copy of this order under section 66(3) and the minute as approved to the Registrar of Companies within 30 days of receipt of the order. The Registrar of Companies shall issue a certificate of Registration of Order and Minute in Form RSC-7 of The National Company Law Tribunal (Procedure for Reduction of Share Capital of Company) Rules, 2016 - All concerned regulatory authorities to act on certified copy of order duly certified by the Deputy Registrar or Assistant Registrar of this Tribunal. Petition disposed off.
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Securities / SEBI
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2021 (5) TMI 86
Investment Adviser entitled to charge fees for providing investment advice from a client in the manner as specified by the Board - Constitutional validity of Regulation 15A of the Securities and Exchange Board of India (Investment Advisers) Regulations, 2013 which was inserted by Regulation 3(XII) of the Securities and Exchange Board of India (Investment Advisers) (Amendment) Regulations, 2020, as also the consequential paragraph 2(iii) of the SEBI Circular dated 23 September 2020 - HELD THAT:- Under section 19 of the SEBI Act, the SEBI is empowered to delegate its powers and functions by general or special order in writing to any member, officer of the SEBI or any other person subject to such conditions as specified by SEBI. Accordingly, the SEBI had issued SEBI (Delegation of Statutory and Financial Powers) Order, 2019 dated 31-07-2019 delegating various powers and functions to the members and officers of the SEBI, as approved by the Board. The said Delegation of Power Order is annexed at Exh.C to the Additional Affidavit-in-Reply - In Clause 3(2) of the Delegation of Power Order, the powers and functions delegated to any member or officer of the Board or authority under this Order may be exercised by any officer or authority, higher in grade or rank or position to the Deputy General Manager. The impugned Circular has been signed by Mr.Naveen Sharma, the General Manager in the Investment Management Department, who is stated in rank higher than the Deputy General Manager. In the circumstances, Mr.Naveen Sharma would be well within his authority to sign the impugned Circular issued under the SEBI Act. As stated earlier, SEBI is an expert regulatory body established under the SEBI Act and the Court, therefore, would have to exercise judicial restraint and the scope of interference would be extremely narrow. The Court cannot substitute own views in place of views of the expert body. Moreover, it is well settled that the Court should be very slow in staying a law by way of interim relief when the constitutional validity of the law is challenged. As noticed that the power to specify a ceiling on the fees exists in the IA principal 2013 Regulations much before the insertion of the impugned Regulation 15A. Regulation 15(9) under Chapter-III General obligations and responsibilities of the impugned IA principal 2013 Regulation makes provisions for Code of Conduct of an Investment Adviser. In view of the above discussion, the prayer for interim relief shall stand rejected. The hearing of the Petition is expedited.
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Insolvency & Bankruptcy
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2021 (5) TMI 82
Holding of meeting of CoC - validity of direction Resolution Professional to call for a meeting of the Committee of Creditors of Corporate Debtor - the members of the meeting were, who originally constituted the CoC during the year 2017 - validity of calling of meeting of those CoC soon after the order of admission of CIRP of the Corporate Debtor, without taking into account the present status of the Financial and Operational Creditors and claims filed to that extent - HELD THAT:- This Tribunal is of the considered view that the Resolution Professional has no Adjudicatory Power under the I B Code, 2016 and further that when once the Committee of Creditors is/was formed, the Resolution Professional cannot change the Committee of Creditors . Suffice it for this Tribunal to make a pertinent mention that the Resolution Professional/1st Respondent cannot constitute a Committee of Creditors afresh, in negation of the earlier constituted Committee of Creditors . This Tribunal on going through the Impugned Order passed by the Adjudicating Authority comes to a consequent conclusion that the observation made inter-alia to the affair that CoC constituted presently by the IRP/RP in derogation of the order passed by it shall stands suspended and shall not exercise any of the powers as provided under the Provisions of IBC, 2016 and the directions issued to the IRP/RP to comply with the directions therein within a period of 10 days from the date of the order. Appeal dismissed.
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2021 (5) TMI 78
Dissolution of the Corporate Debtor - Sections 54 and 60 (5) of the Insolvency Bankruptcy Code, 2016 (the Code) read with Rule 11 of the National Company Law Tribunal Rules, 2016 - HELD THAT:- It appears that the affairs of the Corporate Debtor have been wound up and its assets have been completely liquidated. The documents on record are satisfying that the liquidation is not with intent to defraud any person. The bank account for the purpose of liquidation has been closed. The above facts and circumstances indicate that due process of liquidation, as per extant provisions and in the manner indicated in the Code and Regulations, have been followed by the Liquidator to liquidate the assets of Company and the realized amounts have also been distributed among the respective claimants. The liquidation process has been duly completed as per the provisions of the Code. Thus, it would be just and equitable for this Authority to dissolve the Corporate Debtor. No party is going to be adversely affected thereby. In view of the above the Corporate Debtor deserves to be dissolved. Application allowed.
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2021 (5) TMI 66
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - Time Limitation - HELD THAT:- Whether the period of limitation gets extended upon acknowledgement of debt or not is the point completely been answered by the Hon'ble NCLAT in case of Kishanlal Likhmichand Bothra Vs. Canara Bank [ 2021 (4) TMI 50 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , NEW DELHI] . It has been held by Hon'ble NCLAT that we have no difficulty to state that Section 18 of the Limitation Act is applicable to proceedings under IBC and that if there is acknowledgement of debt in the balance sheets or the OTS proposal, the period of limitation would get extended if the acknowledgement is made before the period of limitation expires. Thus, the date of default is 27.12.2014 thereafter by way of OTS, firstly on date 09.11.2015 and thereafter on 29.01.2016, the Corporate Debtor acknowledged the date (before expiry of period of three years from the date of default). This application is filed on 12.02.2019, i.e. three years from the last date of acknowledgement of the debt. Hence, we hold that it is filed well within the period of limitation - Financial Creditor established that an amount of debt of ₹ 5,99,73,482/- is due and payable by the Corporate Debtor and the Corporate Debtor has committed default failed in paying the same. This application is defect filed within the limitation. Hence, we admit the Corporate Debtor in the Corporate Insolvency Resolution Process. Application admitted - moratorium declared.
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2021 (5) TMI 65
Seeking directions of this Tribunal to direct the Respondent (RP) to allow the participation of the Applicant to introduce the Resolution Plan in the CIRP process of the Corporate Debtor - Section 60(5) of the IBC - HELD THAT:- The CoC has not considered the proposal submitted by the Applicant in toto but has rejected the resolution plan of the Applicant on technical grounds. The apprehension of the Applicant is that the RP is supporting the plan of the single Resolution Plan received earlier and has taken all steps to see that the overall plan was not seen by the CoC. The idea of giving an opportunity to the Applicant to submit his plan by paying the double amount of EMD is to maximize the value of the assets of the Corporate Debtor company as per the intentions of the IBC, 2016. Obviously this has not happened. This Tribunal disposes of this application with directions to the RP to place the overall Resolution Plan of the Applicant before the CoC once again for its informed decision on this issue keeping in view the objectives of the IBC, 2016.
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2021 (5) TMI 63
Condonation of delay in filing application - fresh claim in CIRP - period of 90 days as prescribed under Regulation 12(2) of the IBBI (CIRP) Regulations, 2016 - HELD THAT:- It is pertinent to mention herein that the Resolution Plan has already been received by the CoC as apprised by the RP and it is at the final stage of approval of the CoC (as per RP). At this belated stage, if such types of applications are allowed, the Resolution Plans already received by the CoC from the prospective Resolution Applicants, may get failed, as those are filed on the basis of Information Memorandum (IM). The prospective Resolution Applicants submitted their Resolution Plan on the basis of their financial capacity and availability of funds. There is every likelihood that, if the claims of the different creditors are being accepted in a phase manner and/or on such belated stage, that too after the stipulated time, so provided for submitting claims, in that event, the Resolution Plans can never get materialized and there would be no resolution of Corporate Debtor which is main object of the IB Code, more so, when CIRP is to be completed in a time bound manner. If such claim is accepted, then the Resolution Applicants have to make corrections in their plans, that apart, RP has to make corrections in the IM and its report, correction in the stakeholders list, etc., for which RP has to take permission from this Adjudicating Authority, which may further delay the CIRP. The Hon'ble Supreme Court in the matter of Arcelor Mittal India Private Limited vs. Satish Kumar Gupta Ors, [ 2018 (10) TMI 312 - SUPREME COURT] unequivocally held that the entire time period within which the CIRP ought to be completed is strictly mandatory in nature and cannot he extended. It relied on the primary objective of the Code, which is to ensure a timely resolution process for a CD and principles of statutory interpretation to hold that the literal language of section 12 mandates strict adherence to the time frame it lays down. To enable this adherence to the outer time limit provided in the Code, the court also held that the model timeline provided in Regulation 40A of the CIRP Regulations should be followed as closely as possible . There is no merit in the instant application - Application dismissed.
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PMLA
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2021 (5) TMI 84
Grant of Bail - schedules offences - Legal source of income - disproportionate assets of the petitioner and his family - misuse of post and office made up properties worth of more than ₹ 14 Crores - HELD THAT:- In the present case, the allegation against the petitioner is that he has earned properties, according to the complaint, valued more than ₹ 14 Crores, which was considered to be disproportionate assets of the petitioner and his family. The ACB, Jaipur calculated that the petitioner has earned properties which were 372.16% more than of his known/legal source of income. Further as per the statement made by the learned Additional Solicitor General on the instructions received from officers of the department, properties worth ₹ 30 Crores have been identified by the E.D. during further investigation. Therefore, without expressing any opinion on the merits of the case, looking to the seriousness of the offence alleged against the petitioner, no case is made out to release the petitioner on bail under Section 439 Cr.P.C. - petition dismissed.
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2021 (5) TMI 83
Release of provisionally attached properties - Seeking release of goods and hand over to respondent no.4 liquidator in order to reimbursement of the deposit/investment of the investor/depositor of ACCSL - seeking process of winding up and appointment of liquidator under the provisions of MSCS Act, 2002 - direction to to respondent no.1 and 2 to immediately to frame guidelines with regards to loopholes of the Multi State Co-coperative Society Act, 2002 - HELD THAT:- It is pertinent to note that winding up of Multi-State Cooperative Societies is governed by the provisions contained in Chapter X of the Act of 2002. If the Central Registrar on the basis of the audit, special audit, inquiry or inspection conducted under the provisions of the Act of 2002 is of the opinion that any society ought to be wound up may after giving the society a reasonable opportunity of making its representation, direct it to be wound up. The Central Registrar is also empowered to direct winding up of the society on his own motion. Thus, nothing prevented the aggrieved persons from approaching the Central Registrar to initiate the process for winding up of the society. The Enforcement Directorate has provisionally attached the properties of ACCSL, the society in liquidation, under the provisions of PMLA. It is noticed that the order passed under Section 5(1) of PMLA, provisionally attaching the property is subject to confirmation by the Adjudicating Authority under Section 8(3) of PMLA. It is only after confirmation of the attachment order, the property attached can be taken possession of. Further, confiscation of property can be ordered, when after the trial the offence of money laundering is found proved. Thus, the directions sought by the petitioners as aforesaid, at this stage are absolutely misconceived. In any case, this Court is not inclined to inter-meddle with the proceedings initiated by the Enforcement Directorate in conformity with the provisions of PMLA, in exercise of PIL jurisdiction. There are no good reason to entertain the present writ petition preferred by the petitioners - petition dismissed.
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Indian Laws
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2021 (5) TMI 55
Dishonor of Cheque - main grounds urged in the petition is that the petitioner inspite of serving the sentence for a period of one year in view of the order passed by this Court, the petitioner has been detained in the jail, which is erroneous, arbitrary and unconstitutional - HELD THAT:- The Apex Court in V.K.Bansal s case [ 2013 (8) TMI 488 - SUPREME COURT ] discussed with regard to Section 427(1) of Cr.P.C. which stipulates the discretionary power of the Court to direct sentence to run concurrently and also discussed with regard to when it should be exercised. It is further held that no straight jacket approach can be laid down. However, only substantive sentence can be directed to run concurrently and sentence awarded in default of payment of fine/compensation cannot be directed to run concurrently. In the present case, the petitioner has not paid the amount and he has committed a default of payment of fine/compensation amount, the Apex Court held that Section 427 of Cr.P.C. do not permit to issue a direction for the concurrent running of the substantive sentences with sentences awarded in default of payment of fine/compensation and hence, this Court is of the view that the sentences passed by this Court cannot be directed to run as concurrently as the petitioner has been awarded default sentence and hence, there are no error committed by the learned Magistrate or jail authorities in not considering the request of the petitioner herein as contended in the petition. Petition dismissed.
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